One year ago this week we were driving down to Kingwood, TX, for Jed’s ten year high school reunion. The photo above was taken at the reunion. Jed had been telling me about this guy Dave Ramsey who had a plan for our finances. We stayed with Jed’s brother Sam and his wife Michelle, who were on the plan. On the trip down we listened to “Debt Free Friday” on the Dave Ramsey radio show, and I cried every time one of the famillies screamed, “We’re debt free!”. Over the course of the weekend, with some major encouragement from Sam and Michelle, we decided to jump on board. We made a budget, joined the “Total Money Makeover“, and were on the road to financial freedom.

We cut up our credit cards and started using cash. We got serious about paying off our debts. In four months we paid off $13,000 worth of debt, and were totally debt free for the first time in our lives. Then we started saving up and emergency fund. You can read more about that here. We finished our emergency fund in May with 3 months of expenses saved in an account we don’t touch. In July we started Baby Step 4, investing in our retirement. We are also saving for our first house and for a baby.

I cannot believe that it has only been a year since we started this journey. I cannot express in words the freedom I feel. We don’t make very much, and don’t have much hope of salary increasing. I’m in full time ministry and Jed is a teacher. Even with our modest earnings, we have found financial peace.

Just so you know how we have struggled in the past, I’ll sum up a brief financial history of us for you. In college we both got credit cards in the student union for the free t-shirts. We both started off paying them off each month. Then I started using mine to travel, go to concerts, etc. Probably the worst thing I did was put 5 plane tickets to NYC on my card for my friends. When they paid me back I didn’t put they money towards the card. It took me 8 years to pay for that trip. I don’t know what Jed spent his money on, because we didn’t know each other then. He came out of college with a mountain of student loan debt plus his credit cards. I spent the next few years being consistently late with payments, dodging calls from creditors, and still spending. I bought a brand new car I couldn’t afford, only to have to sell it a year later for a $3000 loss. In 2003 I consolidated $15,000 of debt into a loan. I promptly began to run up more debt. In 2005 I consolidated all of my new debt, $12,000 worth. I paid all of my debts off by the summer of 2008. Jed brought into our marriage the $13,000 worth of debt that we paid off this year. Basically we were both not to be trusted with credit cards, and in a finacial mess. Now that mess is gone and we are free. I never have to worry about a creditor calling me again.

Do you budget? Tell me about your financial story.

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